Pfizer nutrition investor call

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Investor call presentation for Pfizer Nutrition acquisition announcement

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Pfizer nutrition investor call

  1. 1. Wan Ling Martello Paul Bulcke Kurt Schmidt Chief Financial Officer Chief Executive Head of Nestlé Nutrition Roddy Child-Villiers0 Head of Investor Relations 23rd April, 2012 Pfizer Nutrition Acquisition
  2. 2. Disclaimer This presentation contains forward looking statements which reflect Management’s current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments.1 23rd April, 2012 Pfizer Nutrition Acquisition
  3. 3. Paul Bulcke Chief Executive22 23rd April, 2012 Pfizer Nutrition Acquisition
  4. 4. Building on... Our 145 year commitment Our Nutrition, Health & Wellness strategy Our special commitment to the first 1000 days3 23rd April, 2012 Pfizer Nutrition Acquisition
  5. 5. Building on our 145 year commitment... Henri Nestlé4 23rd April, 2012 Pfizer Nutrition Acquisition
  6. 6. On our Nutrition, Health & Wellness strategy...5 23rd April, 2012 Pfizer Nutrition Acquisition
  7. 7. Aligned with the Nestlé Roadmap Competitive Advantages Operational Growth Pillars Drivers6 23rd April, 2012 Pfizer Nutrition Acquisition
  8. 8. Aligned with the Nestlé Roadmap  60/40+  Nestlé R&D  Nestlé Nutrition  Nestlé Health Science, Nestlé Institute of Health Sciences  Venture Funds  M&A: Strategic Cultural Financial7 23rd April, 2012 Pfizer Nutrition Acquisition
  9. 9. Building on our special commitment to the first 1000 days ...8 23rd April, 2012 Pfizer Nutrition Acquisition
  10. 10. Kurt Schmidt Global Head Nestlé Nutrition99 23rd April, 2012 Pfizer Nutrition Acquisition
  11. 11.  The first 1000 days Critical nutritional milestones from conception through infancy  Science-based education & services for the right nutritional choices  Breastfeeding The best form of nutrition in the first 6 months of life The right start of a consumer journey with Nestlé Start Healthy Stay Healthy10 23rd April, 2012 Pfizer Nutrition Acquisition
  12. 12. Pfizer Nutrition... Strong fit with Nestlé  Strategic  Cultural  Financial11 23rd April, 2012 Pfizer Nutrition Acquisition
  13. 13. Infant Nutrition Our roots & the core of Nutrition, Health & Wellness  Start of a new journey Nestlé & Pfizer Nutrition nurturing a healthier generation  Building a strong future on our core passion & roots Nutrition, Health & Wellness12 23rd April, 2012 Pfizer Nutrition Acquisition
  14. 14. Nestlé & Pfizer Nutrition Strong fit in attractive category  Infant Nutrition: High value & high growth  Nestlé Nutrition: Category pioneer & global leader  Pfizer Nutrition: Dynamic & valuable business with exposure in growth markets Strengthened position & a winning combination13 23rd April, 2012 Pfizer Nutrition Acquisition
  15. 15. Infant Nutrition is an attractive category  Large market: ~USD 30 bn  High growth: ~10% p.a. globally  Emerging markets: 73% of market, 13% growth p.a. –Increasing births –Increasing affluence –Increasing awareness of benefits of good nutrition –Premiumisation & broader range of product benefits Source: Euromonitor (Milk Formula)14 23rd April, 2012 Pfizer Nutrition Acquisition
  16. 16. Infant Nutrition is highly dynamic 2010 Market Size ($m) 2010 Market Size ($m) (%) 06-10 Market Growth 06-10 Market Growth (%) 10-16 Market Growth %) (%) 10-16 Market Growth %)hina China 7,306 7,306 28.3% 19.0%28.3% 19.0%her Asia Other Asia 6,475 9.1% 6,475 9.1% 6.7% 6.7%orth America 4,807 North America 0.6% 4,807 0.6% 1.9% 1.9% Egypturope Europe 4,613 6.3% 4,613 6.3% 5.1% 5.1%tin America 2,034 Latin America 2,034 10.9% 10.9% 11.7% 11.7%ddle East & Middle East & 1,586 1,586 17.9% 13.3% 17.9% 13.3%rica Africaustralia & Australia & 197 197 8.2% 4.9% 8.2% 4.9%ew Zealand New Zealand Source: Euromonitor (Milk Formula) 15 23rd April, 2012 Pfizer Nutrition Acquisition
  17. 17. Pfizer Nutrition Dynamic player with strong geographic growth profile  85% of sales in emerging markets – Key markets include: China, Philippines, Thailand, Indonesia, Middle East, Mexico  Strong reputation & equity with Health Care Professionals  High quality brand portfolio with strength in premium products  Strong leadership team with proven track record  Good and consistent financial performance  5,400 employees, 5 factories and 3 R&D centres16 23rd April, 2012 Pfizer Nutrition Acquisition
  18. 18. Nestlé & Pfizer Nutrition Building on Nestlé’s strong base Nestlé Infant Nutrition today:  Global leadership with broad geographic reach  Leading global R&D network  Strong medical & scientific partnerships  Science-based innovation  Focused stand-alone organisation17 23rd April, 2012 Pfizer Nutrition Acquisition
  19. 19. Nestlé Nutrition & Pfizer Nutrition Enhanced presence in dynamic regions Top 10 markets:  9 markets in the world’s top 10 of highest absolute population growth  45%+ of the next 5 years’ category growth will come from China/HK* Nestlé IF & Nestlé IF & GUMs GUMs & Pfizer Nutrition Sales 2011 USD 5bn+ USD 7bn+ % in Emerging Markets 83% 85% % in Asia, Oceania & Africa 45% 55% % in Leading Positions 65% 75%*Euromonitor (Milk Formula)18 23rd April, 2012 Pfizer Nutrition Acquisition
  20. 20. Complementary benefits & platforms Strength from entry level to super premium Allergy Immune Brain Optimal growth Gut Comfort Picky Eater Prevention Protection Development & Development  Enlarged business has a pioneering presence in key benefit platforms  Strong presence in premium & super-premium products19 23rd April, 2012 Pfizer Nutrition Acquisition
  21. 21. Nestlé Nutrition & Pfizer Nutrition Strong cultural fit  Combined management teams with sustained, successful track record  Leadership teams focused on science-based innovation  Consistent focus on compliance, quality & safety; ‘non-negotiable’  Conviction that ‘breast-feeding is best’  Ethical approach to marketing20 23rd April, 2012 Pfizer Nutrition Acquisition
  22. 22. Summary A great fit with capabilities & presence to win  Enhances strong Nestlé business  Positions Nestlé to benefit from population growth  Expands our portfolio  Leverages R&D: Nestlé’s into Pfizer Nutrition brands; Pfizer Nutrition’s into Nestlé brands  Combines strong management teams  Benefits from ‘Nestlé in the Market’ scale, capabilities, systems, etc.21 23rd April, 2012 Pfizer Nutrition Acquisition
  23. 23. Wan Ling Martello Chief Financial Officer2222 23rd April, 2012 Pfizer Nutrition Acquisition
  24. 24. Pfizer Nutrition  A high quality business  Accretive to Nestlé Model  Implementing Nestlé acquisition strategy Creating shareholder value over time by enhancing our positions & capabilities to win in the world’s most dynamic markets23 23rd April, 2012 Pfizer Nutrition Acquisition
  25. 25. Pfizer Nutrition – a high quality business A track-record of dynamic growth CAGR: +13% Sales 2.4 2.2 1.6 1.9 2009-2012 (USD bn) 2009 2010 2011 2012E  2012E Sales: USD 2.4bn 85% of which in Emerging Markets 2012: Nestlé estimate24 23rd April, 2012 Pfizer Nutrition Acquisition
  26. 26. Pfizer Nutrition – a high quality business Healthy level of profitability 25% 25% 25% 23% EBITDA & EBITDA margin 0.6 0.5 0.4 0.4 2009-2012 (USD bn) 2009 2010 2011 2012E A proven track-record of profitable growth 2012: Nestlé estimate25 23rd April, 2012 Pfizer Nutrition Acquisition
  27. 27. Key transaction parameters  Acquisition price: USD 11.85 bn  Multiple (EV/EBITDA 2012E): 19.8x 15.6x post run rate synergies  Full year cost synergies: USD 160 mn  Financing: Cash & additional debt, strong balance sheet maintained  Closing subject to regulatory approvals 2012: Nestlé estimate26 23rd April, 2012 Pfizer Nutrition Acquisition
  28. 28. Pfizer Nutrition accretive to the Nestlé Model  Organic Growth: Above Group’s 5-6% OG guidance  Margin: Immediate  EPS: First full year  Capital Efficiencies: ROIC to exceed cost of capital in year 4 to 527 23rd April, 2012 Pfizer Nutrition Acquisition
  29. 29. Implementing Nestlé’s acquisition strategy To be a category leader  Leading positions globally Focused approach on value-added Strategic growth categories  Category growing at 10% High quality brands, strong market Strong brands in leadership positions  positions High degree of certainty of Operations complementary, Cultural successful integration  good cultural fit Generate value for shareholders  Growth model & healthy returns Financial Top & bottom line, & cash flow enhancing  Accretive Maintain strong credit ratings & financial flexibility  Strong credit ratings maintained28 23rd April, 2012 Pfizer Nutrition Acquisition
  30. 30. ... captures the very essence of Nestlé and the promise we commit ourselves to everyday, everywhere as the leading Nutrition, Health and Wellness Company29 23rd April, 2012 Pfizer Nutrition Acquisition

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